After taking a year to digest its largest acquisition ever, National Commerce Financial Corp. of Tennessee got back in the buying game Monday with its announcement of a deal for $617 million-asset SouthBanc Shares Inc. in Anderson, S.C., for $126 million in stock and cash.
It would be the Memphis companys first bank acquisition since it doubled its assets by buying CCB Financial Corp of Durham, N.C., a year ago. SouthBancs 11 branches are to be merged into Central Carolina Bank and Trust Co., though two overlapping branches may be closed. Sheldon Fox, chief financial officer at $18 billion-asset National Commerce, said the deal is part of his companys new expansion strategy in the Carolinas one that should almost certainly involve more bank acquisitions.
Where it adds to our presence in market we would be interested in transactions with banks from $425 million to about $1 billion in assets, Mr. Fox said.
But he added that National Commerce is more interested in nonbank acquisitions and building branches. This includes opening more branches in stores, and buying SouthBanc should help it do that. Mr. Fox said that the company will announce this week a plan to move National Commerces large supermarket banking operation into SouthBancs territory and neighboring markets.
Rosalind Looby, an analyst with Credit Suisse First Boston in New York, said that by raising its Carolinas profile National Commerce appears to be positioning itself to bid on any branch divestitures resulting from Wachovia Corp.s sale to First Union Corp., which are both based in North Carolina, or to Atlanta-based SunTrust Banks Inc.
Ms. Looby also suggested that National Commerce might emerge as a bidder for the Florida branches of Huntington Bancshares Inc., Columbus, Ohio. With the integration of CCB progressing nicely and momentum accelerating throughout the franchise, the bank plans to resume its historically successful acquisition strategy, she said.
Any unrest surrounding the First Union/Wachovia/SunTrust saga could benefit National Commerce, said Derek Statkevicus, an analyst with Keefe, Bruyette & Woods Inc. in New York. National Commerce is in a position to take advantage of consumer dissatisfaction that the three-way fight may produce, he said.
Mr. Fox said National Commerce wanted to buy SouthBanc because it would fill gaps in its northwest South Carolina market, where his company has now about 40 branches. The deal is expected to close in the fourth quarter.
SouthBanc released a statement Friday that said it was in talks to be acquired for $28 a share, though it did not name the buyer. Its chief executive officer, Robert W. Orr, said the announcement was made because SouthBancs stock price, which had been flat for months, shot up 11.5% on Thursday, to $24.15, and he thought it would be best to disclose why. In heavy trading Monday the stock closed at $27.15.
National Commerces stock dropped 0.84%, to $24.92, Monday.